tv Federal Officials Testify on Efforts to Denuclearize North Korea CSPAN September 19, 2017 7:35am-10:01am EDT
financial intelligence of the department of the treasury where he focused on illicit finance. and so we welcome both our witnesses to the committee. without objection, the witnesses for prepared statements are going to be made a part of the record and all members here will have five calendar days to submit any statements or
additional questions or any extraneous material for the record. with that, i would suggest and would begin with you if you could summarize your remarks and then we will go to questions. >> thank you very much, mr. chairman. >> ranking member angle, members of the committee, thank you for the opportunity to appear before you today to discuss the ever increasing challenge that north korea poses. the threat posed by the ballistic missile and nuclear program is grave. six nuclear tests on september 3 is an unacceptable provocation that ignores repeated calls from the international community for a change in their behavior.
it followed the august 28 ballistic missile launch that overflew missions in al qaeda, japan and launches in july. the provocations represent a tangible threat to the security of japan and south korea in allies and to the entire globe. we cannot allow such violations of international law to continue. north korea also made threats regarding the ability to hit guam and other parts of the united states. the secretary of defense has made clear we have the ability to defend ourselves and our allies from any attack, and there are commitments that remain ironclad. this administration has developed a strategy of applying international pressure to hold them to account. first, we continue to push for strong un sanctions. last night the security council passed another significant set of international sanctions on the second set of sanctions in
the last two months and animus we adopted by the un security council. second, we are using domestic laws to impose sanctions on individuals and entities that enable vdp arcade illicit activities. third, we are pressing the countries to fully implement security council resolution and sanctions and harmonize the domestic regime's with the security council designations. fourth, we are urging the community to cease actions and increase its diplomatic isolation and fifth, we are calling on the countries to cut trade ties and choke off the revenue sources that financed the regime's weapons programs. even as we pursue the denuclearization on the korean peninsula, as it was mentioned by the ranking member it is a central part of our strategy.
we have deployed the system to the republic of korea and continue to take other measures to prepare to respond to any dpr k. attacks, whether the united states, south korea, japan, overwhelming force. we have been clear we are not seeking the regime change and we do not seek accelerated reunification or an excuse to send troops north of the demilitarized zone that we do seek peaceful transition and north korea stops belligerent actions and is not presenting a threat to the united states were allies. it will depend on cooperation from international partners especially china and we are clear i've been viewing the uneven support for measures against the dpr k.. china has taken some notable steps on implementing sanctions,
but we would like to see them do more. we continue to engage with china and russia to further the dpr k., but if they do not act, we will use the tools at our disposal. last month, we've ruled out sanctions targeting russia and the chineschinese individuals as that are doing the illicit trade in north korea. while there's more work to be done we see encouraging signs of progress increasing the pressure on the regime. countries spanning the globe and strong statements against the tests in the most recent nuclear test. countries expelled sanctioned north korean officials, prevent certain individuals from answering the jurisdiction, reduce the size of the north korean diplomatic missions in the country and cancel or downgrade diplomatic engagement or exchanges. in recent day the recent days wo announcements about their efforts to downgrade relations
on north korea. countries have whole to get a visa issuance and are phasing out the use of these workers. south korea, japan and australia implemented unilateral national sanctions targeted entities and individuals and european partners are collaborating on maximizing pressure on the dpr k.. despite all of this, we have yet to see a notable change in the dangerous behavior or signs that it's interested in the talks on the denuclearization. we will continue to step up sanctions are the entities enabling the dpr k. regime and its programs following the nuclear test we are pressing hard for the security council resolution which was adopted last night and we hope that these new sanctions including textiles, positions on oil and shipping etc. they continue to
exert their leverage on the dpr k. i-india should be clear that we will never accept them as a nuclear state. we continue to work to develop additional defense measures to protect the people of the united states and also of our allies. the three remaining u.s. citizen who's been unjustly detained we will continue to reiterate the willingness to resolve this issue to a diplomacy and the interest in the serious engagemenengagement we will expt option but with clear eyes about the past track record of violating the negotiated agreements. thank you again for letting me testify today, and i am looking forward to your questions.
>> thank you for the opportunity to appear before you to update you on measures the treasury department is undertaking in the broad state and the broad administration efforts to deal with provocations and threats posed by north korea. in order to constrain the international community has unanimously enacted multiple resolutions. in fact with each provocation by the dictator, the nations of the world responded with tightening constraints of embargoes and under the previous administration the united nations had already prohibited trade in the matters such as arms, luxury goods, monuments and the maintenance of offices and subsidiaries in their bank accounts and while it is inhibiting the request for the weapons of mass distraction, it wasn't enough. august 5, the administration worked with other members in the
council to pass resolution 2371 striking at the core of the generation. that resolution drafted by the united states embargoes all north korean iron, lead and lana food and requires nations to cap the slave labor. very importantly, last night under the ambassador's leadership, the united states passed with a security council resolution 2375, which now targets the few remaining sources of revenue. very importantly the export of textiles and restrict the ability to require revenue from the slave labor and it cuts off about 55% of the petroleum products are going into north korea and bands further joint ventures in the regime. they are central to our efforts to mobilize the community and denied the funds to the west programs.
the fact however is north korea has been under the sanctions for a decade and nevertheless made strides toward the goal of building an icbm. as it is the case in any agreement the effectiveness of the security council resolutions depends upon implementation and enforcement. kim is. to transfer the funds and to pay for the goods both listeners and illicit. it is only a number of finite ways that north korea can raise the amount of foreign exchange and for many years it's been the gravity of the generation. the estimates prior to the security council resolutions, the shipments brought in more than a billion dollars a year to the regime.
north korea made an additional 500 million or so from the seafood and textile than what the night around 800 million that they were generating in the previous years. this is why the resolutions are so important. important. again effective implementation of this and all of the prior resolutions is essential. consistent with this, on august 22 in the trade with china. we estimate collectively the companies were responsible for importing nearly half a billion dollars worth of north korean coal between 2014 and 201 2016 e sent two messages. first was north korea we intended to deny the regime in s last remaining sources of revenue, unless and until it reversed its course on denuclearize them. the second message was for china tracking the trade and banned goods such as coal despite and we will act even if the chinese
government will not. we targeted a different type of revenue, labor and designated the individuals involved in that set of actions and we also took actions in march engaged in the press on the revenue generation networks we singled out 37 entities involving most types of trade. mr. chairman, i want to share another type of scheme in which north korea is engaged. the regime employs deceptive shipping practices for the origin of goods. ..
in this particular case, this vessel registered in saint kitts and nevis sat in the port for a while and headed back out to water ultimately talking in china with north korean sanctions. the second slide which we'll show now is yet another example in this particular example you have a vessel that pulled into north korea kept its trance
marked drop in violation of maritime law, talked in russia. another vessel from jamaica with the jamaican flag pulled in and picked up the call and headed to china again to circumvent u.n. sanctions. mr. chairman the other prong of our effort is to close and on the way north korea seeks to access the international financial system. because of the sanctions regimes we have in place it is difficult for north korean individuals and indices -- entities to do business in their true name so that's why they maintain representatives abroad nor engage in all manner of obfuscation and in fact i dealt with many of these entities when i served in the private sector. to help conceal north korea's overseas footprint these individuals are crucial to the north korean regime because they have the expertise needed to establish fund companies open bank accounts and conduct
transactions to move and launder funds. it is incumbent upon the financial services industry both here and abroad to stay vigilant and i urge those who might be implicated in the establishment of shell or front companies or anyone who is aware of such entities to come forward with that information now before they find themselves swept up in our net. we are closing in on north korea's trade representatives. it's a rare party designated several bank and trading operatives in china cuba russia and vietnam and we are closely coordinating with the department of justice and others to topple these networks that are transferring funds. the chairman mentioned her actions against the bank of banned on. we have designated that bank under section 311 of the usa patriot act and found it to be about primary money-laundering concern and issued a notice of proposed rulemaking. i recognize some overtime of the committee and therefore i will wrap up my comments.
suffice to say our actions this was the first treasury department actions over a decade that targeted the non-korean non-north korean bank for facilitating north korean financial activity. demonstrates our commitment to take action. we look forward to taking action with the chinese were possible and in the event that is not possible we will move forward to safeguard the international financial system. >> assistant secretary billingslea thank you very much. let me make a point. in terms of when we have seen sanctions that were effective, in 2005 we had sanctions on the bank. at that point in time and talking to a senior defector that works in their missile program he indicated death because we cut off the hard currency they had to shut down their icbm program. one of the things he indicated also or was indicated by the conversations we had with senior
defectors was that during that period of time the ability of the regime or the dictators they called him, to get his hands on our currency was blocked and the inability of the dictator to be able to pay his generals and this was that quote, it's a bad position for a dictator to bn. in retrospect we therefore see two things happened during that period of time in terms of the desperation of the situation within the kim regime. this was under his father. kim jong-il. we have the ability to replicate that if we have the will to do what was done in 2005 and in 2005 it was maybe a dozen banks that were being used. at that time treasury found north korea was counterfeiting 100-dollar u.s. bills and they gave treasury the authority to do this until such time as the
department of state force them to lift the asset freezes but during that time we had an enormous amount of pressure being brought to bear. in this particular case, and let me use your words here but it is china that is primarily involved in the support system in terms of i estimate 90% of the hard currency that the regime needs. now we have managed to cut off a lot of funding because it's very expensive to run and icbm program or a nuclear weapons program. billions and billions and billions of dollars. north korea's money has no value so they have to get this foreign currency into the country in order to pay for it on a month-to-month leases in terms of what they are trying to build out. said if china wishes to avoid future measures such as those imposed on the various company sanctioned for illegal trade
purposes it urgently needs to take demonstrable public steps to eliminate north korea's trade and financial access. that's the point to us here in congress. some of our opinion on this in terms of congress is affected by the fact that china's tie spanks even state-owned banks still do business with north korea. that's got to end completely. we cannot accept half measures on this. these transactions par with supports the regime's nuclear program and i understand the administration is pressing the regime to take action here. understand that many of these banks have significant operations in the united states and that there would be consequences to our economy. however these banks u.s. presence is the very thing that makes our sanctions so powerful. they would rather do business with us then north korea in
terms of how consequential that is to these institutions so at what point do we designate these major chinese banks for doing business with north korea? we have done our our reach to beijing with limited results but should we demonstrate the seriousness with which we take the north korea nuclear threats while further isolating that regime in north korea, kim jong-un, from the financial system that he uses to build out his atomic weapons program? >> chairman first let me say that china and russia are to be recognized for supporting the adoption of the two most recent u.n. security council resolutions which are significant for the clampdown that they enable us to place on kim jong un's -- however we been
very clear that if china wishes to avoid further measures such as that which happened to the bank of banned on puig urgently need to see demonstrable action. i cannot tell the committee today that we have seen since patient evidence of china's willingness to shut down korea revenue flows to expunge illicit actors from its banking system or to expel the various north korean middleman and brokers to continue to establish fund companies. we need to see that happen. and let me just both our assistant secretary say this, last night we saw the security council unanimously approved its third u.n. sanctions resolution this year on north korea and this latest measure restricts the regimes oil imports while banning textile exports and joint ventures however the nature of the security council means that this was a compromise to ensure the regime cannot claim this compromise that came
out of this as a victory which is what they will try to do we have got to demonstrate the impact of these new international sanctions by making certain that this time no one is skirting those sanctions, so what steps will the department stayed in treasury take in the coming days to implement the new security council resolution and how will these actions that you are about to take send this clear message to kim jong-un on the reality that this time we are going to follow through with enforcement and give them in terms of additional hard currency? >> thank you mr. chairman. it's very clear in the process of ramping up a peaceful pressure campaign on the north korean regime that one of the key elements is to keep the
global coalition that we have got behind the sanctions together and to keep every single country in the coalition working actively to continue to squeeze on trade, on labor, on financial transactions, on shipping etc. and what we been doing in the department of state is working across-the-board with every one of our diplomatic partners around the world. the secretary raises the north korea issue in every single one of his meetings with foreign leaders and we have seen a great response from countries around the world who are increasingly outraged over north korea's provocative behavior. so we have really been working hard to close the net. we have seen diplomatic establishments closed, ambassadors kicked out, the north korean representatives kicked out, all kinds of the philippines announced recently they are going to cut trade with north korea so we are having an
effect on a lot of these networks that the north koreans have built around the world. i think the sanctions, 2371 last month announced 2375 last night we are going to be working aggressively to make sure that we and all of our partners around the world are working with every country that we can to make sure that every countries has the capacity to track illicit transactions to go after violators and raising consciousness for those folks also giving them the tools to go after those bad actors is what we are focused on. we are trying to clean up industries and give countries the ability to track better ships that are flag under their flag etc. so i think we are still working on implementing these two recent u.n. security resolutions. we have an ongoing close dialogue with the chinese and what they are doing to track sanctions and we share a lot of information with them.
but we will also drive them to shut down networks that we find. >> thank you secretary thornton. i would like to go to secretary engel for his questions. >> thank you mr. chairman. you know when i was in north korea, and this was a while back , one of the things that struck me we had just deposed saddam hussein and one of the top north korean officials, it was a very high-ranking official, said to us, saddam hussein didn't have nuclear weapons and look where he is now from those two trips i took that the one thing that rang in my ears and now of course they are carrying out those horrific words. let me secretary thornton, let
me ask you, in europe we have nato obviously. in asia we don't have a treaty group like nato, so how do we reassure in your view our allies and our resolve to tokyo because we are afraid of what might happen in los angeles or guam or any other place? how do we reassure them, our allies? >> thank you mr. ranking member. i think we have been working very very closely with both south korea and japan but also with all the other countries in the asia-pacific region on confronting the north korea challenge. obviously we have a very close
and continuing conversation with both japan and korea not just the state department that the department of defense on managing our alliances. obviously we have been talking to both japan and korea as the chairman mentioned about additional defensive needs and capabilities that they may have that they want to move ahead on and so i think the reassurance that we have been providing them with and the constant close communication with them and with others in the region has been significant reassurance to them about our ongoing commitment and defense of our allies. >> thank you very much. secretary billingslea can the u.s. and could you identify the top say 25 firms that compose of north korea's ballistic network and if so would you be willing to provide the information to this committee in classified
nuclear weapons for their own defense when there has never been a retaliation for actions they have taken is a bit of a bridge too far i think. so the concern is that they are pursuing a nuclear program in order to use that program to conduct blackmail and hold other countries hostage and continue to take even worse sorts of steps in their behavior. proliferation is another concern. it undermines the system and would be right for sale and sort of proliferation around the world. so i think two major angles there. >> thank you. my time is expired. >> you said we will never accept
north korea as a nuclear state. what did you mean by that? aren't they already a nuclear state? >> no. we do not recognize them as a nuclear state. >> what does that mean? >> we do not recognize them as a nuclear weapons state. we don't recognize their program and we won't consider them to have nuclear weapons. we are pursuing denuclearization. >> we can't imagine it away. either they are nuclear state or not. i'm not understanding that point. i mean we have to have realistic context before we -- >> will the gentleman yield? >> yes. there is an additional complexity here. >> about delivery. >> yes. >> all right. let me move ochbn. you said that it prevents 55% of
refined petroleum products from coming into north korea and new sanctions prevent half million dollars of coal which leaves about 45%. am i understanding that we are -- our sanctions don't reach the balance of that? why not? >> all coal is prohibited to be trance active. that was under the prior -- >> just pull the microphone a little closer. >> so it is not allowed to trade in north korean coal for in iron, lead or -- >> so percentages relate to noncompliance. >> the 55% number i gave you is kind of the fuzzy math done on how much gasoline is imported today in north korea.
they found they were using banned goods and allow them to send rocket components to north korea. you said that we need to see that happen. it is compliance by the chinese. you described the chinese as the center of gravity. you said if china doesn't comply with sanctions we will use the tools at our disposal. why aren't we already using them? >> i mean otherwise the sanctions sound good in a press release but if they are not honored by the parties they are not effective. what are the tools you intend to use and why aren't we already using them? >> one of the things is north
korea has been under sanctions for many decades. their networks are deeply embedded and they have designed them to escape detection. so it is a little bit complicated to go after these things. what i meant when i say using our tools, we have international sanctions regimes. they signed up to it and is obliged to enforce that. we have a running discussion with many of the countries around the world on information we have and ask them to go after those. if they don't we'll use your authorities to sanctions those authorities. >> i think most would knowledge there is not a good military option. we the talk about it but there actually isn't one. if we surrender the use of the sanctions regime to produce the rumt that we want by not using every tool that's available to us in the end aren't we to north
korea's num lar capabilities? >> i think our strategy is to ramp up the sanctions regime. that's what we have been doing. we have had two security resolutions. that's unprecedented. >> and they have to be implemented in a meaningful way and otherwise they are nice resolutions. it sends the wrong message. that's exactly what we are working on. it is wra we want it seems that the only way that is fully implemented. it is for them to conclude it is
in their own interest to do that. it will only happen when they arrive at the point that their fear of a unified korean peninsula aligned with the united states is out weighed by their fear of a military conflict. i think that's the calculation. i guess my question is what are the strategies that the administration is pursuing that bring china to that point where they conclude it is in their interest to enforce the sanctions because the danger is greater than their fear of some alignment by a unified korean peninsula by the united states or do you agree or disagree with that assessment? >> yeah. i think that's right and i think we have seen the chinese moving it is sort of a recalculation of them undermining their own
security of beefing up of defenses in their region and they are also seeing -- you know, they are also certainly very alarmed at north korea's behavior. the sanctions had a crippling effect on the regime. that was more than a decade ago. we have for the first time in more than a decade taken action against a chinese bank. that was a very clear warning
shot that the chinese understood and we are in repeated discussions with them that we cannot accept to continue access to the international financial system by north koreans through that are financial networks. >> thank you. i yield back. >> thank you mr. chairman. north korea's provocation are the most dangerous yet in launches a ballistic mess l over japan the kim regime has shown it is more em boldened than ever
before. doing 90% of their trade or through technological exchanges. we have seen north korea launched up and we -- not we but south korean's recover add second stage and it was full of chinese components. so china is comply sit in this. the implementations has established -- as established over the past years is often controversial. north korea's nuclear technology has advanced. the recent tests it has become a need for millions of north
koreans, japanese civilians, perhaps the united states and really the world community. and i find myself agreeing with my colleague, mr. sherman again, when he was talking about china. his experience, hearing the same story over and over again. my questions will be focused on what do we do from this point forward? you two are in the seat that you're watching this at a very close level of engagement. you know what is working and not working. how do we go forward so we are not back here in a year discussing what we should have done. i want to know what tools you need to move forward so these sanctions really do work. we both wrote a letter to state and to the treasury providing a list that may have provided north korean banks with indirect correspondence. i'm happy to say they have sanctioned recently and china
has been comply sit with us. these are great positive moves but there are still ten more banks that china can sanction or put pressure onto stop doing business with north korea. my question to you, do you guys have enough tools in your sarsal to make sure that the rural community -- it has to be a buy in from the world community. it is something that's effecting all of the community to get to a point where we have diplomacy that works so that we don't have any conflicts. certainly this world does not want to see a nuclear device go off in a homeland of anybodies. this is this generations fight to make sure this doesn't happen. is there anything else that you need that would make these other countries comply sit with the
sanctions? >> thank you very much sub committee chairman. we definitely believe that the u.n. security actions are the most significant actions we can take on the sanctions front. that's because every country is obligated to enforce those sanctions. it obliges them to do so and it opens up enforcement for us to work with other countries on. i think the most significant actions in the un, which u.n. security council, our representative ambassador hailly has been really key. the other key, i think authorities are doe mostic enforcement authorities which back up -- >> let me stop you there and z sk you this. certainly we can look at the
acts. you said that north korea was using intimidations, actsover intimidation. the words you use describe terrorism. so when we took them off the state sponsor do you feel it would be important to put him back to and do you think it would get compliance by the other countries? >> i think it is another i don't know there are any -- >> i am about out of time -- >> i don't know if there are additional authorities there that would give us additional tools to go after thing. i think it would be another layer. >> another layer would be good. i appreciate your time. sorry i didn't get to you assistant secretary. ayield back. thank you.
okay. we go now to brad snyder from illinois who is also here for other south korean officials. it is during the time the missile was shot hefr japan. >> thank you for leading that designation. it was difficult to unts the threat but also understand the grat ji. we it is axel right their testing and itting it on a missile. we talked about u.s. strategy working within our laws and the united nations. we have had some discussion that
seems to be where priority number dare goal you talked about our wholes are not, not regime or wrap we have no desire to inflict harm on the long suffering i what i would tliek ask you, what are north korea's goals? >> i think it's pretty hard to get inside the mind of the in -- north korean leader. i think he has been clear to complete his nuclear weapons program in order to be able to sit down as a sort of nuclear
weapons fully developed state. >> it seems -- but their long-term goals. >> i really do have to defer to the state department. my job is to drag them to the table. i think one of the members mentioned the philosophy that representative smith, i think that regime survival and perpetuation is pretty much an over arching purpose and goal. >> that seems to be the collected with them. how about nine that.
-- of course they have also looking to maintain stability in their region and to create the conditions for further economic development. >> okay. so it seems there is this shared perspecti perspective between the u.s. and china by should have sanctions or the path to put pressure on north korea. the only path is through denuclearization. what off ramps can we provide to show them the way they are headed is a dire risk to their regime. every option being on the table
and there's a different path and that path is open to them? >> well, it is difficult to do this when they shooting icbm's and exploding hydro general bombs on the border of china. i think we have been very clear in our public statements that denuclearization is the goal. we have used words and action. public statements by ow us and many of our partners and allies but also through public messaging. they are picking up on them to tell them it is the only path to survival for the regime. we have been quite explicit about that. we are trying to show them through our sanctions actions and i think, you know, they have a different view so far but we are continuing to press on that. >> and i don't mean this next
question any other way that i'm asking. it really is an honest question. is it better to have a very clear consistent message that you take these steps, this is what we do? or is it better to leave uncertainty and perhaps having a mix of messages? >> i think it's condition good to have con sis dent -- you know, that has a very weak kmub case system and did i feelty to reach the top leader. it's also important not to take any options off the able so there is options to move towards the negotiating.
>> we talked about the outside pressure and to put pressure on north korea. i would appreciate the opportunity, how we create the internal pressure and not just make it harder for paumt of the mill in con dlas. with that i yield back zbhchl i think i make a very important point. there's another this is the second time we have talked to a defector who did they are in afraid of aings because what the
terms of the feelings of the kim regime. he seemed to indicate that although that was the focus of the kim family it may not be the to kus of focus of north koreans. it is what is costing the country the standard of living, the ability to give anyone else opportunity. it is solely in the interest of the maniac that is currently in power. it is what we need to begin to process of having hearings to dig deeper into this calculus. >> i think it's important. i couldn't agree more. this is why i was talking about goals. if the goal is regime survival
that's an opportunity to have it one direction. if the goal is the submission of south korea the development can be the same and create an opportunity for engagement is different and challenging. >> it is a critical conversation to have. >> thank you, mr. chairman. it is for it is a threat. i would say to the united states to world order, to denuclearization and proliferati proliferation. there are a lot of folks and whether it's here in the media they all say there's no military
option. they say there's a military option but it's unthinkable so we'll never use it. i look at it this way, in order to achieve our objectives, we have three areas. it is through actual diplomacy. number two is missile defense which we would obviously need to defend ourselves and the third is a military option. people that understand instruments of power and various instruments of power i think has to understand you cannot do diplomacy without a big stick to use. whether it's military, chiecono, that there has to be the unthinkable in order to make diplomacy work.
it is good but i think we'll be unsuccessful. it is great and we need it but if we back up and say as long as we build a missile defense north korea will be allowed to have a nuclear weapon i think it leads to massive proliferation around the world. the jcpoa is up fairly soon and in fact you have given north korea access to a nuclear weapon. let me just ask a question to you. so when they say there is no military option, even though it is unthinkable. i think this ranks up there. does that strengthen your ability to get north korea to the table or does it weaken it? >> i think we would be exceedingly unwise to take
anything off the table. i was a senate staffer up here when the frame work was negotiated. we gave all kinds of heavy fuel and look where we are now. this administration has made very clear that we are not going to kick this can down the road. we can't. he is testing advanced nuclear designs and icbms. it is a matterover ti of time n before he poses a threat not just to our friends and allies, but the us. >> as a prior administration said we have to live with a nuclear north korea saying that the prior administration was ready to live with a nuclear
north korea. if we say as long as we have missile defense we are unwilling to do what's for north korea and pushing chinese in the south china sea, whatever. if we do that can you talk about what the rest of the world will look like even if we don't sigh we accepted it what does it do to south korea and japan and to our authority to enforce the nonproliferation? >> it is on sort of the broader implications. i would tell you, we are not willing to live with a nuclear north korea. north korea has proven that they are certainly willing to share nuclear technology with prior regimes to sell capabilities.
he pointed out it was alleged to have been constructed with north korean support. these are big issues. we are determined to induce the chinese to help solve this problem. >> and i would give you a time i'm out. i'm not ignoring you. it was to reiterate what the secretary said. i couldn't imagine in the situation that syria is in the today, which i think is tragic and i think there's been a lack of action on our part to fix that. i couldn't imagine had they had a nuclear program what we would be looking at today. there is a lot of social instability in north korea. what happens some day when that is destabilized? i think they are all very important questions.
i want to commend you for the hard work on this issue. i yield back. we'll go to congresswoman norman torres. >> thank you for bringing us together for this very very important incredible issue we have in dealing with north korea and all of the problems that they have caused most recently. i think we pretty much all agree there is no magic bullet in dealing with this regime. i think we pretty much are in agreement that so far all of the sanctions and everything we have done hasn't worked. where have we gone wrong? i don't know. part of that, you know, we are trying to address that here. i think we have to be realistic the regime is willing to do anything, put people and the entire world at risk in order to
achieve what they want to achieve and that is a nuclear weapon to reach american citizens. we have been talking a lot. we haven't really mentioned hawaii, which is a lot closer. another issue i think we have neglected to address and that is the consumer issue. we haven't really engaged consumers in a more global inclusion to deal with north korea and china's appetite to have slave-type workers working in their companies. as a consumers when i'm buying products where is that chain of where this product was made and who it was made by? we know many of our products are made in china but not by whom,
correct? so to me the bigger issue is are we being surgically enough to inflict the maximum pain on the regime versus inflicting the maximum pain on the people of north korea? congresswoman wagner and i have introduced that north korea follow the money out which would the director of national intelligence to produce a national intelligence of revenue sources of the north korean regime. my hope is it will make the policy more precise and a bit more effective. we still cannot get away from engaging more people if foreign
governments are willing to engage and everyone is interested in doomsday clock. it was advanced by another 30 seconds. i think we missed another opportunity to talk about what is happening in the korean area more closely. i would like to ask if you would agree that a clear picture of north korea revenues, if we need to have a better picture of north korea revenues in order for our sanctions to be more effective. >> so you are always going to find that we are interested in more intelligence, not less. we are an intelligence driven organization and the more precise information the better. i would say that, you know, back to your point about opportunities missed, we are at the point where enforcement is
crucial. we have the various units. in the past it was some times very difficult to judge the proper enforcements because they weren't complete embargoes. >> the best you can get is for the consumer to be more informed and to say i will no longer purchase any good because they are failing to support us in ensuring that we have a nuclear save world. >> i agree 100%. i would highlight two particular areas. you talked about labor. one that he has had at the u.n. is getting back the idea that we would cap at whatever level it is seafood is the other area to make sure we go after --
>> can you give me an estimate of north korean revenues are from elicit sources? >> virtually all of it is illegal because they are banned -- >> so what are our option in dealing with that? >> meritime enforcement. we can enforce prohi base on the sale of north korean raw materials. >> thank you. my time has expired. i yield tobaccback. >> thank you for being here. i think always when we make big decisions we should look at history. my understanding is that the russians put the regime in power foirs inva first to invade the south, the west being aware of what's
taking place in eastern europe when the soviet union kept moving through and taking that area. we have had three kims in charge. they have all committed crimes and been very whand gone back t the flight 858, the attempted assassination of the south korean president. they have a history of doing bad things. they feel entitled because they are put there to be in charge of north korea. as the chairman said, they want to conquer the south. it is a cease fire or truce or agreement not to -- there's no treaty involved. and we have been played by the kims for years. they talk about causing war, nuclear capability and the west says oh, we'll pay you not to do
that. if you promise to be nice. they promise not to declare war on anybody. they take our money and what do they do a few years later? they do the same thing. it has been going back to the clinton administration. they understand one thing, that the united states can be bought off if they just make a lot of noise about doing bad things to the rest of us. we should understand that. we should understand that being nice and saying we will take care of you and being -- encouraging them in a diplomatic way to not declare war has not worked. i'm not saying we ought to go to war i'm saying that's what they understand. so the president, this president is taking a different point of view. he is talking in a language that
we want to do all of these trades. what if he doesn't? little kim, he doesn't think like we do. what are the rest of the options. >> so we have a strategy. >> what is it? >> it's the pressure strategy. we want to solve this through negotiated settlement peacefully but we are not taking any options off the table. >> i only have a minute. you have to kind of cut to the chase. what are the other options? >> options to use force, options to use sanctions pressure, to choke off the regime's revenue to get them to come to the
negotiating table. we have been very clear about the strategy. we are not going to pay for negotiations as we have done in past history. they sought payoffs. we made it very clear the president and secretary that we are not going to go down that road this time. we are going to ban together. >> so we have a military option down the road if nothing works. would you agree with that? >> ablily. >> we're targeting his sk si and m and we need to rip it out root and stem. that's what we are focused on,
shouting down there the m these are total cutoffs. it is a huge percentage give than we actually have relatively well shut off his arms trade. he has basically been reduced to high valium low margin commodities, minerals, things like that. we have to choke that off. because of lack of enforcements, line china today, russia he has agents operating abroad in foreign jurisdictions. is that is our next step.
>>. >> i served under active command most were dekted to north carolina. it -- most were detected to north korea. often it is not for us to say it's dictated bay ty the facts the ground. if we have great options we might do then you might have to double down at what you're doing. if you want to walk through some of those not so good military options. let me start with this. the goal is to denuclearize,
correct? we don't know how many nuclear weapons they have, is that correct? say that again. >> yes. >> we also don't know where those nuclear weapons are, correct? they are pretty good at hiding them. >> they are good at hiding things, yeah. >> so in order to get rid of those weapons and get them going we would need to find those weapons and destroy them. isn't that correct? >> since we don't know where they are we don't know how many they have. we could need a grand inbut for you to do you're job you need to understand the military option. north carolina also has the
knowledge to build nuclear weapons, isn't that correct? >> yes! and they have the knowledge to build icbms. you can't unlearn that. to keep them from doing that in the future we would to have one our wall slys to coop. >> i don't know that it's necessarily -- i'm putting those that abob ban d-- abandoned nuc ambitions. if we apply economic with dip low mt.ic freltz to keep them
from the future we would need this. let's step away from nuclear weapons. they also have about 5,000 tons of km kchemical weapon, isn't t correct? >> they do have chemical weapons. >> and they have rockets and artillery and so on, correct? they can baunch we have lunss of thousands and when with million sz. so with any military option we wouldn't be able to contain escalation, isn't that correct? >> it is all hypothetical. so i think it depends on a lot
of other scenarios. you're telling the story, so go ahead. >> so defense secretary mat tis has dad we have diplomacy and economic ambassador. where are we with that? why hasn't the president nominated an ambassador? >> we are working on it. p. >> i'm just salg it does send and we are -- and i urge them to get its act together. with that i yield back.
>> thank you. we go now to mr. lee zeldon from new york. >> i believe that the administration has done a great job over the first several months in office in making new strides in bringing china to the table, to have more diplomacy, to have increased economic pressure, to engage in campaigns and i think ambassador haley deserves a lot of credit for her work with the success. we wish her nothing but the best. some of her colleagues have spoken about not using a military option.
i think we should agree that the military option should be the last possible option we would be using if everything else were to fail. some of my colleagues would go a little bit further. i think from some of the other testimony here and your answers there is certainly an agreement amongst others who would disagree believing that it is one that helps with multilateral diplomacy and increased. it would be unwise to take the military option all of the table. i wanted to ask you a little bit about what that red line is and has the administration taken a public position on a red line? should it -- do you believe we
should have one? for me the red line should be that north korea should not have the able to the united states and there's still a component that appears to not it was as far. so thinking of military options, what's the red line? >> the assistant secretary and i are here representing the economic sanctions lover in that. we are determined for a peaceful
et lieu here. we're determined to use the pressure campaign to get the north korean regime to change its path and to come to the negotiating table with a serious set of proposals on denuclearization. how we verify that, complete, verifiable, irreversible denuclearization is what we are seeking through a negotiated settlement. i think we have room to squeeze them through the pressure of the international community. i think we're seeing that that strategy is working, that the north koreans are feeling that pressure, and we are focused on getting them back to the table. i think as far as red lines go for a military option i would want to defer that question to some future point where we are
not as much engaged in the diplomatic and economic pressure part of the campaign. >> i personally believe that, when the president said that north korea would be met with fire and fury, that if north korea were to attack the united states, they would be met with fire and fury. i was not offended by any means, and i believe that kim jong un needs to know and, as someone who is homicidal not suicidal, he needs to know that he would be putting himself and his regime at great risk by attacking us. there is a lot of hard work that's been done by the administration, doubling down, tripling down. making great progress, specifically the united nations. i would say, if we truly want to prevent north korea from having the ability to deliver a nuclear warhead to the united states, they are getting so much closer to it that, if we are actually
serious about the military option, we're going to have to start seriously having that discussion because that may be imminent. i yield back. >> mr. mike mccaul, who also chairs the committee on homeland security. >> thank you, mr. chairman. i appreciate that. yeah. i view this as actually probably one of the biggest threats to the homeland, if they are capable of delivering an icbm with a nuclear warhead to either guam or the mainland of the united states, i know looking back historically the network, this access between pakistan, iran, north korea, once pakistan got it, we couldn't take it away. iran we had our negotiations and now it looks like north korea has it. i think, once a country has this capability, it's very difficult to take it away. so i don't envy your positions in terms of trying to negotiate
our way out of this. i think the last previous administrations have failed to get us to that point, and now we are where we are. and i think iran is probably watching this whole thing play out in terms of what's our next step going to be as well. i am not going to get into military options. i know that's not your expertise. i do think cyber should be looked at as something that could be done to shut them down. and i know we have tremendous capability in that regard. my question is -- i know it's been talked a lot about russia and china, will they cooperate with these sanctions and how much leverage is china putting on north korea. but my question really has to go to the more illicit side of the house. kim jong un has this north korean office 39 that raises
cel sells basically drugs. illegal exports of minerals. counterfeit cigarettes and other things. what are we doing to try to counter act that. when it comes to proliferation in the sale of arms. how much do you estimate north korea is making off proliferation to countries like iran and syria? >> congressman, good to see you. >> yeah, you too. >> so, one of the things that's very important to underscore is that the treasury department and the authorities we wield are not, as you know from your time with the department of justice, they are not just sanctions. sanctions is one of many tools we have. what we use to in effect collapsed the bank of dangdong was to root out the north koreans in that bank. in terms of the proliferation of
weaponry, because of previous u.n. security council resolutions we have been able to dry up much of the illicit sales that they were engaged in to vario vario various african regimes. there are still some transactions they periodically float that we're actively engaging various countries to deter signing of contracts and going down that road. it would be unwise for them to take these actions. we are in a full court press on that. because of the success that ambassador haley and the state department have had at the u.n., nearly every export coming out of north korea today, as of last night, nearly every export is now illicit. textiles are now illicit. you cannot trade in north korean textiles or basic minerals anymore. under the previous administration, talking about bureau 39, one of the things they'd do is sell these huge, overpriced bronze statues, and
the weapons were the kicker on the side. as a sweetener for paying six times the going rate for a bronze statue. that organization was sanctioned. and under our administration we started to root out the rest of that particular arts and monuments revenue generating schema. north korean labor is another category that they are getting significant money from. and with the results last night, there is now not a freeze or cap on north korean laborers, there is a requirement to wind it down. i am not a big fan of wind-downs because it's real hard to verify that. but that is nevertheless a big step forward, and we intend to enforce that as well. i have reiterated on multiple occasions with counterparts in the gulf and elsewhere that we need to see the north koreans gone. the department of state has been very active on this front, and we are seeing a drying up of revenue associated with the slave labor that the north koreans employ. >> if i can, to my last question, north korea
proliferating weapons to iran and syria. >> so, we do track any kind of illicit proliferation networks from the north koreans and go after those transactions again with colleagues at treasury and other agencies in the u.s. government. when we find them, we try to block them or deter them, and we have had some success. it's a continuing effort on our part, and we devote a lot of attention to that in our bureau of non-proliferation. >> but it is happening. >> i think there are transactions that we are worried about, yes. >> i know some of that may be in another setting than this. thank you very muching. thank you very much. i want to thank the witnesses for their testimony. i thank you for answering the members' questions here today. i am sure more of those questions will be submitted for the record. for you to answer. there are a few issues that are
urgent for us, but i don't think any of them are more urgent than the north korea threat at this time. to its credit, the administration recognized this early on. secretary tillerson it's first focus as secretary of state was north korea. and he has been extensively engaged working with allies in the region while pressuring china and russia and other countries that are funding the kim regime. we need more sanctions, tougher sanctioning. we need to supercharge this right now. and the administration is moving in the right direction. and china, each day, is rethinking the cost of its financial support for north korea. the administration's focus on korean slave labor abroad is very good. sanctions are just one element of power. we need to bring to bear. we need to stop giving only lip service to the power of
information inside north korea. broadcasting information in to change attitudes and conditions in north korea. we simply aren't doing this well enough. and it must be a priority. and again, thank you for your testimony. we look forward to your follow-up. and this hearing stands adjourned. live on capitol hill this morning for a hearing on the nomination of former utah governor jon huntsman to be ambassador to russia. the senate foreign relations committee will also consider the nomination of a. wes mitchell to serve as assistant secretary of state for european and